Morning Highlights: Oil rises on U.S. demand signs, Russia warns talks futile without Moscow

Thursday, August 21, 2025

Oil extended gains Thursday, with U.S. demand strength and supply concerns outweighing uncertainty over Ukraine diplomacy.

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Market Snapshot (as of 6:00 EST):

• Brent (Oct): $67.52 (▲$0.68 / +1%) – near 2-week high

• WTI (Oct): $63.41 (▲$0.70 / +1.1%)

Both contracts rose over 1% on Wednesday.

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Russia Pushes Back on Peace Efforts

Moscow dismissed attempts to resolve the Ukraine war without its participation as a “road to nowhere,” dampening earlier optimism around U.S.-led talks.

“If the White House’s efforts do result in a halt to hostilities in Ukraine, and Russia gradually comes back into the international fold, it will be bearish. But for now, Brent’s floor remains at $65,” said independent analyst Gaurav Sharma.

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U.S. Demand Boosts Sentiment

The EIA reported crude inventories fell 6m barrels last week, far exceeding forecasts for a 1.8m draw.

“Crude oil prices rebounded as signs of strong demand in the U.S. boosted sentiment,” said ANZ’s Daniel Hynes.

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India Caught in U.S.-Russia Crossfire

• Trump confirmed a 25% tariff on Indian goods from Aug 27 over its continued Russian crude purchases (≈35% of India’s imports).

• Nayara Energy, 49% owned by Rosneft, has imported at least 7 cargoes (700,000 bbl) on sanctioned vessels to keep buying Russian oil, Reuters reported.

• India reiterated it recognizes only UN sanctions, not unilateral U.S./EU measures.

Analysts note this raises the risk of tighter sanctions on Russia, lending support to oil prices.

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Norway’s Aker BP Finds Major North Sea Oil

Aker BP announced a 96–134m bbl oil discovery in the Yggdrasil area, one of Norway’s largest in a decade.

• Partners include Equinor (40%) and Orlen (12.3%).

• CEO Karl Johnny Hersvik: “Omega Alfa is among the largest commercial discoveries in Norway in a decade.”

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Outlook: Demand Strength vs Diplomatic Risks

• Bullish: U.S. stock draw, resilient demand, threat of tighter sanctions.

• Bearish: Prospect of peace deal (longer-term), tariff tensions with India, fresh supply from Norway.

“Given uncertainty over Ukraine and the U.S.-India standoff, oil remains well-supported above $65,” said Tamas Varga of PVM Oil Associates.